China’s investment in foreign wind-powered electricity markets has approached $7 billion in Europe alone as private and stated-owned Chinese companies move "aggressively" to capitalize on fast-growing renewable energy markets, according to a recent research brief published by the U.S.-based Institute for Energy Economics and Financial Analysis (IEEFA).
According to the report, the European Union ($6.8 billion) and Australia ($5.1 billion) were the main recipients of Chinese wind investment from 2011 to 2017.
China’s foreign renewable energy investments have increased as a result of the country's pan-Asian Belt and Road Initiative (BRI), but the majority of these investments are in non-BRI countries, with Europe taking the biggest share, the research shows.
"China is now a driver of the European energy transformation, and its international leadership in low emissions sectors of the future are entirely aligned with efforts to increase China’s global economic influence," said Simon Nicholas, the author of the report, and a Sydney-based IEEFA energy finance analyst.
"While Chinese foreign renewable energy investments were boosted by the launch five years ago of its Belt and Road Initiative, its foreign renewable energy investment now extends well beyond that framework," Nicholas said.
"This is a superpower taking its energy policy global," he added.
According to the report, China's state-owned independent power producers have acquired big wind projects in nine European countries, aiming especially to diversify their foreign portfolios and gain expertise in offshore wind technology.
From 2010 to 2017, only 30 percent of Chinese foreign investment in renewables was in BRI countries, the report said, adding top recipients included Pakistan ($1.9 billion), Malaysia ($0.7 billion), Turkey ($0.6 billion), India ($0.4 billion), and Vietnam ($0.4 billion). The remaining 70 percent went to non-BRI countries.
The brief builds on an IEEFA paper published in January that described how China has become a leading global renewable energy investor, "defying an overall slowdown in Chinese overseas investment as the country further positioned itself to dominate in new energy technologies such as batteries and electric vehicles".
That report put China's 2017 investment in large clean energy projects in foreign countries (greater than $1 billion) at $44 billion, up from $32 billion in 2016.
Last week's report added that between 2015 and 2017, a total of $34 billion was invested in BRI countries, whereas $61 billion went to non-BRI countries.
The research notes, however, that while Chinese wind and solar investment goes well beyond the BRI to developed nations, coal-fired power activity remains high within the BRI and in other developing countries.
"From 2003 to 2017, the majority of China's foreign power investments in Southeast Asia went to hydro ($45 billion) and coal projects ($12 billion), amounts significantly higher than Chinese wind investment in the EU ($6.8 billion) and Australia ($5 billion) [from 2011 to 2017]," it said.
"Although this trend is influenced by the fact that wind and solar investment has ramped up only within the last few years, it is clear that Chinese coal power investment is restricted more to the BRI and to developing countries," it added.
IEEFA conducts research and analyses financial and economic issues related to energy and the environment, with a mission to accelerate the transition to a diverse, sustainable and profitable energy economy.
By Hale Turkes